The effect of financial leverage on real and accrual-based earnings management

Past research has documented a substitution effect between real earnings management (RM) and accrual-based earnings management (AM), depending on relative costs. This study contributes to this research by examining whether levels of (and changes in) financial leverage have an impact on this empirically documented trade-off. We hypothesise that in the presence of high leverage, firms that engage in earnings manipulation tactics will exhibit a preference for RM due to a lower possibility—and subsequent costs—of getting caught. We show that leverage levels and increases positively and significantly affect upward RM, with no significant effect on income-increasing AM, while our findings point towards a complementarity effect between unexpected levels of RM and AM for firms with very high leverage levels and changes. This is interpreted as an indication that high leverage could attract heavy outsider scrutiny, making it necessary for firms to use both forms of earnings management in order to achieve earnings targets. Furthermore, we document that equity investors exhibit a significantly stronger penalising reaction to AM vs. RM, indicating that leverage-induced RM is not as easily detectable by market participants as debt-induced AM, despite the fact that the former could imply deviation from optimal business practices

IMPACTS OF CLIMATE CHANGES ON HYDROLOGIC BALANCE: A CASE STUDY OF VOCHA PLAIN, KORINTHIA

Σκοπός της εργασίας αυτής αποτελεί η αξιολόγηση υδρολογικών παραμέτρων του κλιματικού μοντέλου σε σχέση με πραγματικά υδρολογικά δεδομένα. Απώτερος στόχος της εργασίας αποτελεί η εκτίμηση των επιπτώσεων των κλιματικών αλλαγών στο υδατικό ισοζύγιο. Για αυτόν το σκοπό, συνδυάστηκε το κλιματικό μοντέλο RegCM3 και η μέθοδος Thornthwaite. Για την εφαρμογή της μεθόδου, επιλέχθηκε η περιοχή που καλύπτει το νοτιοανατολικό τμήμα του Κορινθιακού κόλπου. Η περιοχή χαρακτηρίζεται από έντονη αστικοποίηση, εντατική γεωργία, τουριστική ανάπτυξη, με συνεχώς αυξανόμενες υδατικές ανάγκες. Από την αξιολόγηση των υδρολογικών παραμέτρων του κλιματικού μοντέλου RegCM3 με τα αντίστοιχα πραγματικά δεδομένα διαπιστώνεται η αξιοπιστία του μοντέλου. Από τον συνδυασμό του κλιματικού μοντέλου RegCM3 και της μεθόδου Thornthwaite διαπιστώνεται ότι κατά τις μελλοντικές περιόδους 2028-2040, 2058-2070 και 2088-2100 αναμένεται αύξηση της πραγματικής εξατμισοδιαπνοής, ως αποτέλεσμα της μείωσης της βροχόπτωσης και της αύξησης της θερμοκρασίας.The aim of this study is to evaluate climate model hydrological parameters in comparison to recorded hydrological data and estimate the impacts of climate change on water balance. For this purpose, a combination of climate model precipitation and temperature data and Thornthwaite method was applied for the period 1988-2000 and the future periods 2028-2040, 2058-2070 and 2088 2100. The application of this combination was carried out in a coastal region in Southeastern part of Korinthiakos Gulf (southern Greece). The area is suitable for this target, because it is characterized by urbanization, intensive agriculture and tourism development, with increasing water demands. The evaluation of climate model parameters in comparison to observed data shows that the RegCM3 model is a reliable model. According to the future projections and the Thornthwaite method, the real evapotranspiration is estimated to increase, as a result precipitation decrease and temperature increase

Vascular smooth muscle contraction in hypertension

Hypertension is a major risk factor for many common chronic diseases, such as heart failure, myocardial infarction, stroke, vascular dementia and chronic kidney disease. Pathophysiological mechanisms contributing to the development of hypertension include increased vascular resistance, determined in large part by reduced vascular diameter due to increased vascular contraction and arterial remodelling. These processes are regulated by complex interacting systems such as the renin angiotensin aldosterone system (RAAS), sympathetic nervous system, immune activation and oxidative stress, which influence vascular smooth muscle function. Vascular smooth muscle cells are highly plastic and in pathological conditions undergo phenotypic changes from a contractile to a proliferative state. Vascular smooth muscle contraction is triggered by an increase in intracellular free calcium concentration ([Ca2+]i), promoting actin-myosin cross-bridge formation. Growing evidence indicates that contraction is also regulated by calcium-independent mechanisms involving RhoA-Rho kinase (ROCK), protein kinase C (PKC) and mitogen-activated protein kinase (MAPK) signaling, reactive oxygen species and reorganization of the actin cytoskeleton. Activation of immune/inflammatory pathways and noncoding RNAs are also emerging as important regulators of vascular function. Vascular smooth muscle cell [Ca2+]i, not only determines the contractile state but also influences activity of many calcium-dependent transcription factors and proteins thereby impacting the cellular phenotype and function. Perturbations in vascular smooth muscle cell signaling and altered function influence vascular reactivity and tone, important determinants of vascular resistance and blood pressure. Here we discuss mechanisms regulating vascular reactivity and contraction in physiological and pathophysiological conditions and highlight some new advances in the field, focusing specifically on hypertension

The option market reaction to bank loan announcements

In this study, we examine the options market reaction to bank loan announcements for the population of US firms with traded options and loan announcements during 1996-2010. We get evidence on a significant options market reaction to bank loan announcements in terms of levels and changes in short-term implied volatility and its term structure, and observe significant decreases in short-term implied volatility, and significant increases in the slope of its term structure as a result of loan announcements. Our findings appear to be more pronounced for firms with more information asymmetry, lower credit ratings and loans with longer maturities and higher spreads. Evidence is consistent with loan announcements providing reassurance for investors in the short-term, however, over longer time horizons, the increase in the TSIV slope indicates that investors become increasingly unsure over the potential risks of loan repayment or uses of the proceeds

Quantifying uncertainties in precipitation: a case study from Greece

The main objective of the present study was the examination and the quantification of the uncertainties in the precipitation time series over the Greek area, for a 42-year time period. The uncertainty index applied to the rainfall data is a combination (total) of the departures of the rainfall season length, of the median data of the accumulated percentages and of the total amounts of rainfall. Results of the study indicated that all the stations are characterized, on an average basis, by medium to high uncertainty. The stations that presented an increasing rainfall uncertainty were the ones located mainly to the continental parts of the study region. From the temporal analysis of the uncertainty index, it was demonstrated that the greatest percentage of the years, for all the stations time-series, was characterized by low to high uncertainty (intermediate categories of the index). Most of the results of the uncertainty index for the Greek region are similar to the corresponding results of various stations all over the European region

NOX5: Molecular biology and pathophysiology

Nicotinamide adenine dinucleotide phosphate (NADPH) oxidases (Nox), comprise seven family members (Nox1–Nox5 and dual oxidase 1 and 2) and are major producers of reactive oxygen species in mammalian cells. Reactive oxygen species are crucially involved in cell signalling and function. All Noxs share structural homology comprising six transmembrane domains with two haem-binding regions and an NADPH-binding region on the intracellular C-terminus, whereas their regulatory systems, mechanisms of activation and tissue distribution differ. This explains the diverse function of Noxs. Of the Noxs, NOX5 is unique in that rodents lack the gene, it is regulated by Ca2+, it does not require NADPH oxidase subunits for its activation, and it is not glycosylated. NOX5 localizes in the perinuclear and endoplasmic reticulum regions of cells and traffics to the cell membrane upon activation. It is tightly regulated through numerous post-translational modifications and is activated by vasoactive agents, growth factors and pro-inflammatory cytokines. The exact pathophysiological significance of NOX5 remains unclear, but it seems to be important in the physiological regulation of sperm motility, vascular contraction and lymphocyte differentiation, and NOX5 hyperactivation has been implicated in cardiovascular disease, kidney injury and cancer. The field of NOX5 biology is still in its infancy, but with new insights into its biochemistry and cellular regulation, discovery of the NOX5 crystal structure and genome-wide association studies implicating NOX5 in disease, the time is now ripe to advance NOX5 research. This review provides a comprehensive overview of our current understanding of NOX5, from basic biology to human disease, and highlights the unique characteristics of this enigmatic Nox isoform

Metzincins and related genes in experimental renal ageing: towards a unifying fibrosis classifier across species

Background We have previously described a transcriptomic classifier consisting of metzincins and related genes (MARGS) discriminating kidneys and other organs with or without fibrosis from human biopsies. We now apply our MARGS-based algorithm to a rat model of age-associated interstitial renal fibrosis. Methods Untreated Fisher 344 rats (n = 76) were sacrificed between 2 to 104 weeks of age. For gene expression studies, we used single colour (Cy3) Agilent Whole Rat Genome 4 × 44k microarrays; 4-5 animals of each sex were profiled at each of the following ages: 2, 5, 6, 8, 15, 21, 78 and 104 weeks. Intensity data were subjected to variance stabilization (www.Partek.com). Data were analysed with ANOVA and other statistical methods. Results Sixty MARGS were differentially expressed across age groups. More MARGS were differentially expressed in older males than in older females. Principal component analysis showed gene expression induced segregation of age groups by sex from 6 to 104 weeks of age. The expression level of MMP7 correlated best with fibrosis grade. Severity of fibrosis was determined in 20 animals at 78 and 104 weeks of age. Expression values of 15 of 19 genes of the original classifier present on the Agilent array, in conjunction with linear discriminant analysis, was sufficient to correctly classify these 20 samples into non-fibrosis and fibrosis. Overrepresentation of MMP2 protein and CD44 protein in fibrosis was confirmed by immunofluorescence. Conclusions Based on these results and our previous work, the MARGS classifier represents a cross-organ and cross-species classifier of fibrosis irrespective of aetiology. This finding provides evidence for a common pathway leading to fibrosis and will help to design a PCR-based clinical tes

NOX5: molecular biology and pathophysiology

Nicotinamide adenine dinucleotide phosphate (NADPH) oxidases (Nox), comprise seven family members (Nox1–Nox5 and dual oxidase 1 and 2) and are major producers of reactive oxygen species in mammalian cells. Reactive oxygen species are crucially involved in cell signalling and function. All Noxs share structural homology comprising six transmembrane domains with two haem‐binding regions and an NADPH‐binding region on the intracellular C‐terminus, whereas their regulatory systems, mechanisms of activation and tissue distribution differ. This explains the diverse function of Noxs. Of the Noxs, NOX5 is unique in that rodents lack the gene, it is regulated by Ca2+, it does not require NADPH oxidase subunits for its activation, and it is not glycosylated. NOX5 localizes in the perinuclear and endoplasmic reticulum regions of cells and traffics to the cell membrane upon activation. It is tightly regulated through numerous post‐translational modifications and is activated by vasoactive agents, growth factors and pro‐inflammatory cytokines. The exact pathophysiological significance of NOX5 remains unclear, but it seems to be important in the physiological regulation of sperm motility, vascular contraction and lymphocyte differentiation, and NOX5 hyperactivation has been implicated in cardiovascular disease, kidney injury and cancer. The field of NOX5 biology is still in its infancy, but with new insights into its biochemistry and cellular regulation, discovery of the NOX5 crystal structure and genome‐wide association studies implicating NOX5 in disease, the time is now ripe to advance NOX5 research. This review provides a comprehensive overview of our current understanding of NOX5, from basic biology to human disease, and highlights the unique characteristics of this enigmatic Nox isoform

Importance of cholesterol-rich microdomains in the regulation of Nox isoforms and redox signaling in human vascular smooth muscle cells

Vascular smooth muscle cell (VSMC) function is regulated by Nox-derived reactive oxygen species (ROS) and redox-dependent signaling in discrete cellular compartments. Whether cholesterol-rich microdomains (lipid rafts/caveolae) are involved in these processes is unclear. Here we examined the sub-cellular compartmentalization of Nox isoforms in lipid rafts/caveolae and assessed the role of these microdomains in VSMC ROS production and pro-contractile and growth signaling. Intact small arteries and primary VSMCs from humans were studied. Vessels from Cav-1−/− mice were used to test proof of concept. Human VSMCs express Nox1, Nox4, Nox5 and Cav-1. Cell fractionation studies showed that Nox1 and Nox5 but not Nox4, localize in cholesterol-rich fractions in VSMCs. Angiotensin II (Ang II) stimulation induced trafficking into and out of lipid rafts/caveolae for Nox1 and Nox5 respectively. Co-immunoprecipitation studies showed interactions between Cav-1/Nox1 but not Cav-1/Nox5. Lipid raft/caveolae disruptors (methyl-β-cyclodextrin (MCD) and Nystatin) and Ang II stimulation variably increased O2− generation and phosphorylation of MLC20, Ezrin-Radixin-Moesin (ERM) and p53 but not ERK1/2, effects recapitulated in Cav-1 silenced (siRNA) VSMCs. Nox inhibition prevented Ang II-induced phosphorylation of signaling molecules, specifically, ERK1/2 phosphorylation was attenuated by mellitin (Nox5 inhibitor) and Nox5 siRNA, while p53 phosphorylation was inhibited by NoxA1ds (Nox1 inhibitor). Ang II increased oxidation of DJ1, dual anti-oxidant and signaling molecule, through lipid raft/caveolae-dependent processes. Vessels from Cav-1−/− mice exhibited increased O2− generation and phosphorylation of ERM. We identify an important role for lipid rafts/caveolae that act as signaling platforms for Nox1 and Nox5 but not Nox4, in human VSMCs. Disruption of these microdomains promotes oxidative stress and Nox isoform-specific redox signalling important in vascular dysfunction associated with cardiovascular diseases